US Treasury Flags Bitcoin, Ethereum Linked To Chinese Fentanyl Trade — Elizabeth Warren Proposes A Solution
October 6, 2023 12:07 AM | 3 min read
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The Office of Foreign Assets Control (OFAC) of the United States Treasury has included a new group of cryptocurrency wallets on its specially designated nationals (SDN) list.
What Happened: These wallets are linked to individuals and companies involved in the illegal fentanyl trade. The drug trafficking network, primarily based in China, utilized various cryptocurrencies to facilitate their operations. The government has now flagged six entities, including five individuals and one company called Valerian Labs.
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According to blockchain surveillance firm Chainalysis, the addresses identified by OFAC received a total of nearly $3.8 million worth of cryptocurrency.
OFAC’s action identified a total of 17 wallet addresses involved in the illegal operations, spanning across Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Tron networks. The majority of illicit transactions on the latter two blockchains were conducted using stablecoins—crypto tokens backed by relatively stable fiat currencies, such as the U.S. dollar.
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Why It Matters: Senator Elizabeth Warren (D-Mass.) took to X on Thursday to raise concerns about Chinese companies selling fentanyl ingredients. In her tweet, she emphasized that these companies utilize cryptocurrency transactions to hide their identities and the movement of funds. “How do Chinese companies sell fentanyl ingredients? By using ‘cryptocurrency transactions to conceal their identities & the location & movement of their funds’, per the Department of Justice. I have a bipartisan bill to crack down on crypto funding crimes.”
During a congressional hearing in June, Warren expressed her concerns about the role of cryptocurrency in facilitating fentanyl drug transactions. Speaking before the Senate Banking Committee, Warren advocated for the passage of her proposed bill called the Digital Asset Anti-Money Laundering Act. The bill aims to address loopholes in existing anti-money laundering regulations and prevent drug suppliers and cartels from utilizing cryptocurrencies for their illicit activities.
Citing a report by Elliptic, Warren highlighted that according to their findings, 90 Chinese suppliers had traded enough precursor drugs for cryptocurrencies.
She further stated that this amount of fentanyl would be enough to “kill nearly 9 billion people, all paid for by crypto.”
Price Action: At the time of writing, Bitcoin was trading at $27,560.15, down 0.50% in the last 24 hours, according to Benzinga Pro.
Photo by Sheila Fitzgerald on Shutterstock
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